Analyst Calls: Maruti Suzuki, Marico, ZEEL, City Union Bank

Good morning!

The domestic stock market on Friday showed early signs of a possible breakout from its consolidation range. And Nifty futures on Singapore traded 3.50 points lower this morning, signalling a tepid start for Dalal Street.

As you head for the day’s trade, here is a compilation of overnight analyst calls on various stocks.


• Motilal Oswal has maintained a Buy rating on Maruti Suzuki with a target price of Rs 7,390. The brokerage increased its consolidated earnings per share of Maurti for FY20 by 18 per cent to factor in the possible increase in the sales volumes. While the near term demand headwinds persist, Maruti is best placed to weather these headwinds, particularly BS6 transition due to limited price inflation, the brokerage said. Shares of Maruti Suzuki closed at Rs 7,017 apiece on Thursday, down 1.9 per cent.

• SBI Cap has maintained its hold rating on Marico with a target price of Rs 335. The brokerage belives core Indian hair oil revenue of Marico will be under stress along with Saffola edible oil. Further, expansion in adjacent categories is likely to outgrow overall company growth. With several FMCG companies noting weak demand, the brokerage expects the topline growth guidance of Marico’s core portfolio to be at risk. Shares of Marico closed at Rs 356 apiece, up 0.3 per cent on Thursday.


• Edelweiss maintained its buy rating on Zee Entertainment Enterprises with a target price of Rs 443. According to the brokerage, advertising growth in FY21 is likely to pick up due to anticipated revival in gross domestic product and benefits from corporate tax cut. Further, the ongoing promoter stake sale is likely to remove the promoter pledge related overhang on the stock. Shares of Zee Entertainment Enterprises closed at Rs 343, up 11.7 per cent on Thursday.

• Axis Securities has given a buy rating on City Union Bank with a target price of Rs 239. The brokerage said it remains positive on account of its consistent earnings and stable asset quality. Slower loan growth and asset quality stress could impact in the near term but the recent tax cuts will aid the bank. City Union Bank reported a tepid second quarter earnings on account of slowdown in loan growth and compressed net interest margins due conscious focus on credit quality and pricing pressures. Shares of City Union Bank closed at Rs 215, up 0.5 per cent on Thursday.

• ICICI Direct has maintained a Buy rating on Kalpataru Power Transmission with a target price of Rs 534. The company’s order book with good traction in non T&D business and improved performance of its subsidiaries is expected to register a consistent growth, the brokerage said. Also, strategy to monetise non-core assets and sales proceeds from three transmission assets would improve return ratios. Shares of Kalpataru closed at Rs 460 apiece, up 2.2 per cent on Thursday.